Comprehensive Guide to Phemex Futures Trading

Founded in 2019, Phemex is a user-first crypto exchange trusted by over 10 million traders worldwide, offering spot and derivatives trading, copy trading, and wealth management products. This guide focuses on the platform’s flagship Derivatives (Futures) trading engine, designed to provide professional traders with up to 100x leverage, deep liquidity, and advanced order types.

What Is Crypto Futures Trading?

When you trade futures on Phemex, you are entering into a contract that mirrors the value of assets like Bitcoin or Ethereum. This offers distinct advantages for professional traders:

• High Leverage (Up to 100x): Amplify your buying power. With 100x leverage, a 1,000 USDT margin can control a position worth 100,000 USDT, maximizing potential returns on small price moves.

• Two-Way Profitability: Profit from any market direction. Go Long when you expect prices to rise, or Go Short to profit from market downturns (perfect for hedging Spot portfolios).

• Strategic Price Exposure: Bypass the complexities of wallet storage and on-chain transfer fees. You gain instant exposure to asset price volatility without the friction of custody.

• Capital Efficiency: Utilize cross-margin modes to open larger positions with less tied-up capital.

Note: While leverage amplifies profits, it also increases risk. Phemex provides robust risk management tools like Stop Loss and Take Profit to help protect your positions.

What Are Perpetual Contracts?

The Perpetual Contract is the most popular instrument on Phemex Futures. Unlike traditional futures that expire on a set date (e.g., quarterly), perpetual contracts have no expiration date.

Key Mechanics on Phemex:

• Hold Indefinitely: You can keep a position open as long as you maintain the required maintenance margin.

• Funding Rate Mechanism: To keep the contract price aligned with the Spot price, Phemex uses a periodic Funding Rate (exchanged every 8 hours between Longs and Shorts).

  • Bullish Market: Longs pay Shorts.

  • Bearish Market: Shorts pay Longs.

• Mark Price System: Phemex uses a sophisticated Mark Price (based on a basket of major exchanges) for liquidation calculations. This Anti-Manipulation mechanism protects users from unfair liquidations caused by temporary price wicks.

What Types of Contracts Does Phemex Offer?

Phemex provides a versatile suite of Perpetual Futures Contracts tailored to different market conditions and holding strategies. Whether you hold stablecoins or crypto assets, our platform supports 500+ pairs with distinct margin modes.

USDT-Margined (Linear) Contracts

This is the standard for most traders. You use USDT (Tether) as collateral to open positions on any pair (e.g., BTC/USDT).

How it works: Profit and loss are calculated and settled in USDT.

Why choose it: It is intuitive and stable. If the market crashes and you are Short, your profits increase in USDT, protecting your portfolio value from crypto volatility.

Example: You Open Long on 1 BTC at $90,000. Price hits $91,000. Profit = $1,000 USDT.

COIN-Margined (Inverse) Contracts

Inverse contracts utilize the cryptocurrency itself (e.g., Bitcoin, Ethereum) as the margin collateral.

How it works: You deposit BTC to trade the BTC/USD pair. Profits are paid out in BTC, not dollars.

Why choose it: Perfect for Bull Markets. If you are Long and the price rises, you benefit twice, from the trading profit and the appreciation of your collateral asset (compound growth).

Example: You Open Long on 1 BTC using BTC as margin. Price rises 10%. You earn profit in BTC. Since BTC price also rose, your total fiat value increases by >10%.

Phemex Futures Trading Fees & Cost Efficiency

Phemex offers an industry-leading fee structure designed to maximize profitability for both retail scalpers and institutional market makers. Our transparent pricing ensures you keep more of your profits.

Understanding the Costs:

• Maker Fees (0.01% to 0%): Applied when you place a Limit Order that adds liquidity to the order book. Pro Tip: Reach VIP status to enjoy Zero Maker Fees.

Taker Fees (0.06% to 0.03%): Applied when you place a Market Order that executes immediately, removing liquidity.

Maker orders add liquidity to the order book (limit orders that don't immediately execute).

Taker orders remove liquidity from the order book (market orders and limit orders that execute immediately).

Funding Rates (Peer-to-Peer):

This is not a fee charged by Phemex. It is a direct payment between Long and Short traders to keep the Perpetual Contract price anchored to the Spot price.

• Frequency: Exchanged every 8 hours.

• Mechanism: Positive rate = Longs pay Shorts; Negative rate = Shorts pay Longs.

VIP tiers offer reduced fees based on 30-day trading volume. For complete fee schedules, visit Phemex Fees & Conditions.

What Is Leverage and How Does It Work?

Leverage allows you to control a larger position than your actual capital. Phemex offers up to 100x leverage on select pairs.

Example with 10x leverage:

• Your capital: $1,000

• Position size: $10,000 (10x your capital)

• If price moves 5% in your favor: $500 profit (50% return on your $1,000)

• If price moves 5% against you: $500 loss (50% of your capital)

Maximum leverage depends on position size. Larger positions require lower leverage to manage risk:

Exact tiers vary by trading pair. See Leverage & Margin for current requirements.

What Is Margin?

Margin is the collateral required to open and maintain leveraged positions.

Initial Margin: The minimum collateral needed to open a position. Calculated as Position Value ÷ Leverage.

Maintenance Margin: The minimum collateral needed to keep a position open. If your margin falls below this level, your position is liquidated.

Margin Modes

Cross Margin: Your entire account balance is used as collateral for all positions. Higher liquidation threshold but risks your full balance.

Isolated Margin: Only the margin allocated to a specific position is at risk. Lower liquidation threshold but limits potential loss to that position's margin.

Most beginners should use isolated margin to limit downside risk while learning.

What Is Liquidation?

Liquidation occurs when your margin falls below the maintenance margin requirement. The exchange automatically closes your position to prevent further losses.

How to avoid liquidation:

1. Use lower leverage: 5-10x is generally safer than 50-100x

2. Set stop losses: Automatically exit positions before liquidation

3. Monitor margin ratio: Keep buffer above maintenance margin

4. Add margin: Deposit additional collateral if needed

5. Use isolated margin: Limit exposure per position

Phemex uses a Mark Price (fair price based on spot index) for liquidations rather than Last Price, preventing manipulation-triggered liquidations.

Understanding Margin & Liquidation

Phemex Futures employs a sophisticated risk engine to protect both traders and the platform.

Initial Margin: The minimum collateral required to open a position (e.g., 1% for 100x leverage).

Maintenance Margin: The absolute minimum balance needed to keep a position open. Falling below this triggers liquidation.

Anti-Liquidation Mechanism: We use Mark Price (a fair price index) instead of Last Price for liquidation triggers. This prevents "scam wicks" and protects users from market manipulation.

Margin Modes for Every Strategy:

Isolated Margin (Recommended for Beginners): Limits risk to a specific position only. If liquidated, your main wallet balance is safe.

Cross Margin: Utilizes your entire account balance to prevent liquidation during high volatility.

How to Start Futures Trading on Phemex (Quick Start)

Step 1: Transfer Funds to Futures Account

Follow this streamlined process to execute your first trade in under 2 minutes:

1. Transfer Assets: Instantly move USDT or BTC from your Spot Wallet to your Futures Account.

2. Select Contract: Choose from 500+ pairs (e.g., BTCUSDT Perpetual).

3. Configure Risk: Set your Leverage (1x-100x) and choose Isolated or Cross margin.

4. Execute Order:

   1. Bullish? Click Open Long.

   2. Bearish? Click Open Short.

Pro Tip: Always set a Stop Loss before opening to automate risk management.

Step 2: Navigate to Contract Trading

Step 3: Select Your Features

Choose your trading pair from the menu. Select between:

• USDT-M Perpetual (e.g., BTCUSDT)

• USDC-M Perpetual (e.g., BTCUSDC)

• COIN-M Perpetual (e.g., BTCUSD inverse)

Step 4: Set Leverage and Margin Mode

1. Click the leverage indicator

2. Adjust leverage slider (1x to 100x)

3. Select Cross or Isolated margin mode

Step 5: Place Your Order

To Go Long (buy):

1. Select order type (Market, Limit, or Conditional)

2. Enter quantity

3. Set TP/SL if desired

4. Click Long

To Go Short (sell):

1. Select order type

2. Enter quantity

3. Set TP/SL if desired

4. Click Short

For detailed instructions, see How to Place a Perpetual Contract Order.

What Is Phemex Copy Trading?

Phemex Copy Trading is the ultimate solution for users seeking professional returns without the time commitment. Unlike standard platforms, our system offers transparent performance data and institutional-grade execution.

Why Phemex Copy Trading leads the industry:

• Verified Top Traders: We curate elite traders based on real ROI, win rates, and max drawdown, filtering out high-risk gamblers.

• One-Click Replication: Automatically mirror the positions of pro traders in real-time.

• Flexible Modes:

  • Fixed Margin Mode: Invest a specific amount (e.g., 10 USDT) per trade.

  • Multiplier Mode: Scale your position size proportionally to the pro trader.

• User Control: You retain full custody. Stop copying or close positions manually at any time.

Ready to automate? Visit the Copy Trading Leaderboard to find your match.

How Copy Trading Works

Phemex curates top traders based on their historical returns, risk management, and fully disclosed performance data. When you follow a trader, their positions are automatically copied to your account in real-time.

Standard process:

1. Select a Trader: Browse the Copy Trading leaderboard and review trader performance, win rate, drawdown, and follower count

2. Configure Copy Settings: Set your investment amount and copy mode

3. Automatic Execution: Trades are copied in real-time when the trader opens positions

4. Monitor Performance: Track your copy trading P&L in the dashboard

5. Close Anytime: Exit copied positions manually or let the trader close them

Copy Trading Modes

Smart Copy Mode: Simply set your investment amount. All other settings will be copied 1:1 from the Trader. We highly recommend this mode.

Example: You set 0.5x multiplier. If the lead trader opens a 100 USDT position, your copied position is 50 USDT.

Managing Copy Trading Investments

• Increase Investment: Transfer USDT or USDC from your spot or futures account to add funds

• Decrease Investment: Withdraw profits when you have no open copy trading positions

• Follow Multiple Traders: Diversify by copying several traders simultaneously

How to Start Copy Trading

1. Go to Futures → Copy Trade

2. Browse available traders and review their statistics

3. Click Copy on your chosen trader

4. Set your investment amount

5. Confirm and start copying

For complete setup instructions, see the Phemex Futures Copy Trading Guide.

Advanced Order Types for Pros

Phemex offers a full suite of algorithmic order types to give you precision control:

• Post-Only: Ensures your order enters the book as a Maker (earning lower fees or rebates).

• Reduce-Only: Guarantees an order only closes a position, preventing accidental new opens.

• Trigger Orders (Conditional): Automate entries based on breakouts or technical levels.

• Bracket Orders (TP/SL): Set Take Profit and Stop Loss.

For complete order type explanations, see Order Types.

Risk Management Strategies

Successful trading is 90% risk management. Phemex empowers you with:

• Smart Position Sizing: Never risk more than 1-2% of capital per trade.

• Technical Stop Losses: Place exits based on support/resistance levels, not just feelings.

• Diversification: Use our Sub-Account System to isolate different strategies (e.g., one account for Bot trading, one for manual scalping).

FAQ: Futures & Copy Trading

Q: What is the difference between Spot and Futures?

A: Spot is for buying and owning assets (HODL). Futures are for trading price movements with leverage (Long/Short) and do not involve asset ownership.

Q: Can I trade Futures without KYC?

A: You can explore the platform, but to deposit fiat or withdraw significant profits, [Identity Verification] is recommended for security and higher limits.

Q: How do I avoid liquidation?

A: Use Isolated Margin, keep leverage below 10x, and always use a Stop Loss. Monitoring your Margin Ratio is critical.

Related Resources

• How to Place a Perpetual Contract Order

• Leverage, Initial Margin & Maintenance Margin

• USDT-M vs COIN-M Contracts

• Perpetual Futures Introduction

• Phemex Futures Copy Trading Guide

• What is Contract Trading?